Tabung Haji: Don’t expect too much from 2018 dividends

Lembaga Tabung Haji Director Datuk Seri Zukri Samat speaks during a press conference at the Tabung Haji headquarters in Kuala Lumpur January 15, 2019. ― Picture by Hari Anggara
Lembaga Tabung Haji Director Datuk Seri Zukri Samat speaks during a press conference at the Tabung Haji headquarters in Kuala Lumpur January 15, 2019. ― Picture by Hari Anggara

KUALA LUMPUR, Jan 15 ― Muslim pilgrimage fund Lembaga Tabung Haji (TH) gave its assurance to depositors today that it can still afford to pay dividends for the 2018 financial year.

Its director Datuk Seri Zukri Samat said today the transfer of underperforming assets, mostly stocks, to the Special Purpose Vehicle (SPV) formed by the Minister of Finance made it possible to yield dividends.

“We've restored the balance sheet. So for 2018 we can pay the dividends, but don't expect too much lah,” Zakri told a press briefing about the fund's turnaround plan.

TH revealed late last year that it was short of RM4.1 billion in assets when it paid out the 2017 dividends to depositors, and therefore in breach of the Tabung Haji Act 1995 that states hibah, or dividends, can only be paid if the fund had made distributable profits.

Last month, the fund said MoF through the SPV will be acquiring its underperforming properties and equities in exchange for RM10 billion in sukuk and RM9.9 billion in Islamic redeemable convertible preference shares (RCPS-i).

The move came after Minister in the Prime Minister Department Datuk Mujahid Yusof Rawa claimed TH had accrued RM4.1 billion in losses as a result of poor investments, most of them highly questionable.

The SPV, Zukri said today, is tasked to “rehabilitate” the dud assets, and will also have the flexibility to redeem the sukuk at any time without penalty once the assets are recovered.

“This will give TH fixed income assets and stabilise TH's balance sheet and rectify the asset or liability mismatch,” he said.

Barisan Nasional backbenchers were highly critical of the planned asset transfers, noting that some of the equities were in highly profitable companies like Malakof or UEM Sunrise.

Zukri admitted that they have long-term potential but said they are underpeforming now.

Given that the fund aims to give out the 2018 dividends despite its weak finances, the transfers provided TH the lifeline to recover.

“It's hard to envisage how long it would take for the underperforming assets to recover to our book cost,” he said.

All assets were transferred at book cost, not at the current price.